In Germany, a works council (Betriebsrat) has a binding say on an AI tool mainly when the tool is objectively capable of monitoring employees' behaviour or performance (section 87(1) no. 6 of the Works Constitution Act, BetrVG). In that case you can only introduce it with the council's agreement, otherwise a conciliation committee decides. Separately, section 90 requires you to inform and consult the works council in good time when you plan to use AI, but there it has no veto. If your business has no works council, there is no co-determination, but data protection law and the EU AI Act still apply.
I am a developer, not a lawyer, and this is not legal advice, just the operator's perspective. This article covers German law only. On 28 October 2026 I read the Works Constitution Act on gesetze-im-internet.de and the two court decisions at the Federal Labour Court and in the journal Betriebs-Berater. All quotes are my translations. More on AI in day-to-day business is collected on my AI Basics page.
Does your business have a works council at all?
For many small teams, the answer is no. Section 1(1) BetrVG provides that works councils are elected in establishments that normally have at least five permanent employees entitled to vote, three of whom are eligible for election. From five people there can be one, but only if employees elect it. Under section 17(3), in small businesses together with section 17a no. 3, three employees entitled to vote can, among others, call the meeting that starts the process.
If you don't have one, skip to "If there is no works council". Since an election can happen at any time, write your rules so that they would stand up in front of a works council.
Works council and AI: the rights at a glance
The German Works Constitution Act mentions artificial intelligence explicitly in three places. The provision that matters most day to day does not use the word at all: section 87(1) no. 6.
Section 90: inform early, consult together. The employer must inform the works council about the planning in good time, with the necessary documents, and consult early enough for its suggestions and concerns to be taken into account. That is not a veto. The Hamburg Labour Court summed it up: section 90 grants only rights to information and consultation, not a right of co-determination.
Section 87: here you need agreement. Without it, the conciliation committee (Einigungsstelle) decides under section 87(2).
Section 80(3): an expert. Where AI is concerned, an expert is deemed necessary, subject to a more detailed agreement with the employer. Budget for it.
When co-determination applies: section 87(1) no. 6
The key word is "designed". The Federal Labour Court (Bundesarbeitsgericht, BAG) reads it broadly. In its decision of 13 December 2016 (1 ABR 7/15, para. 22), it held that technical systems are "designed" to monitor if they are objectively capable of collecting and recording information about an employee's behaviour or performance, and that the employer's subjective intention to monitor is irrelevant.
What matters is not whether you want to monitor anyone, but whether the tool could. If it stores inputs or usage per person and you can analyse that, number 6 is likely to apply. Check that for your specific tool.
A decision on ChatGPT shows where the line can run. The Hamburg Labour Court (Arbeitsgericht Hamburg, decision of 16 January 2024, 24 BVGa 1/24) heard an urgent application by a group works council that wanted, among other things, a ban on ChatGPT at work. The employer allowed use in the browser via employees' own personal accounts, at their own cost. The court found no right of co-determination under number 6: the monitoring must be carried out by the technical system itself, and any monitoring by the ChatGPT provider is not exercised by the employer. The browser itself was already covered by a group works agreement. The court also rejected number 1, because the AI guidelines concerned how the work is done, and instructions that merely specify the duty to work are not subject to co-determination.
Two points on how to read this, both my own interpretation:
- It was a first-instance decision in urgent proceedings, not Federal Labour Court case law.
- It concerns personal accounts. For a company account in which you can see usage or chat histories, the Federal Labour Court's test applies again. Choosing personal accounts just because they may avoid co-determination can create a data protection problem instead, as soon as customer or company data goes into those accounts. Why is explained in Shadow AI: When Your Team Uses AI in Secret.
An AI works agreement: what goes in it
The agreement with the works council is best put in writing. The binding form for that is a works agreement (Betriebsvereinbarung). Under section 77(2), it must be adopted jointly and recorded in writing; under subsection 4 it applies directly and is mandatory; and under subsection 5 it can be terminated with three months' notice unless agreed otherwise.
The law does not say what an AI works agreement must contain. For a small business, I would cover these points. This is my recommendation, not a list from any law:
- Which tools, for what. With name and plan, and a way to add tools without a new agreement.
- Which analyses are allowed. Whether logs, usage statistics or individual chat histories may be evaluated, for what, and by whom.
- Which data may go in. This matches the rule in your AI usage policy.
- Who checks results. Especially where AI output prepares decisions about people.
- Training. Everyone is briefed before using a tool.
- Review. A date on which you check together whether the rules still fit.
How to introduce AI with a works council
- Inform early. When you start seriously planning a tool, not at the point of purchase, with documents on tool, purpose, data and analysis options.
- Clarify number 6. Does the tool record usage or content per person, and who can see it?
- Allow for an expert. For AI, an expert for the works council is deemed necessary. You agree together on who, for what and at what cost, and the business then pays.
- Agree first, then roll out. For tools subject to co-determination, the agreement comes first, then rules and a briefing for everyone.
If there is no works council
Without a works council, you decide alone which tools you use. You still have obligations:
- Data protection. If a tool analyses your employees' data, the GDPR applies just as it does to any other processing of personal data. Employee monitoring does not become lawful just because nobody has a say.
- AI literacy. The duty under Article 4 of the EU AI Act has no minimum business size. How to meet it is covered in AI Literacy Under the AI Act: Training Staff.
- Prohibited practices. Emotion recognition in the workplace has been banned under Article 5(1)(f) of the AI Act since 2 February 2025, except for medical or safety reasons.
- High-risk AI in HR. AI systems for recruitment, selection, promotion, dismissal or monitoring and evaluating employees are listed in Annex III point 4 of the AI Act. From 2 December 2027, Article 26(7) applies to them: before putting such a system into use at the workplace, deployers who are employers must inform the workers' representatives and the affected workers. So you have to inform the employees themselves even without a works council. This means systems intended for exactly that purpose, not a general chatbot someone uses to draft a job ad.
My advice for small teams without one: act as if there were a works council. Say early which tool is coming, what for, and what you will not analyse. How to assign the responsibility for this is covered in Do I Need an AI Officer?
Frequently asked questions
Does the works council have to agree before we use ChatGPT?
It depends. In 2024, the Hamburg Labour Court found no co-determination right where the employer allowed personal accounts in the browser. With a company account in which individual usage or chat histories can be analysed, section 87(1) no. 6 is likely to apply. If you plan to build AI into your work processes, section 90 requires you to inform the council in good time, even where it has no co-determination right.
From how many employees can there be a works council?
Under section 1(1) BetrVG, in establishments that normally have at least five permanent employees entitled to vote, three of whom are eligible for election. It comes about through an election, not automatically.
Do I need an AI works agreement?
The law requires agreement for tools subject to co-determination, not a particular form. A works agreement under section 77 is the written, binding way to record it.
Who pays for the works council's expert?
Under section 40(1) BetrVG, the employer bears the costs arising from the works council's activities. Under section 80(3), the expert is brought in subject to a more detailed agreement with the employer on who, for what and at what cost. Where AI is concerned, bringing one in is deemed necessary.
What applies if we have no works council?
Then there is no co-determination, but the GDPR and the EU AI Act still apply. If, from 2 December 2027, you use a high-risk AI system intended for HR decisions, you have to inform the affected employees in advance. This is not legal advice; for your specific case, get professional advice.
Where to go from here
Today, list the AI tools running or planned in your business and whether any of them stores usage or content per person. That is the basis for talking to your works council or, if you have none, your team. You record the rules themselves in an AI usage policy. How other businesses bring AI into their teams is what we discuss in my community Claude Practitioners. Membership does not replace a legal review.
